Growth

Efficient growth is key for business expansion and yielding
sustainable returns to stakeholders. We aim to secure
ThaiBev’s leadership position as the largest beverage
company in Southeast Asia and generate sustainable
return for shareholders by developing innovative products,
diversifying our portfolio, leveraging our efficient
distribution network in core markets, and expanding our
business in Southeast Asia. Through our collaboration with
Fraser and Neave, Limited (“F&N”), Singapore’s leading
beverage producer and distributor, as well as publisher,
we are strengthening our foundation for sustainable growth
in the future.

Diversity

Attaining business sustainability from diversified revenue
streams is core to our plan. This involves increasing income
contribution from our non-alcoholic beverage segment and
overseas sales.

Our expansion into the non-alcoholic beverage market is an
important part of our strategy to become the leading total
beverage producer and distributor in the region. We focus on
offering a more diversified product portfolio and optimizing our
distribution network. ThaiBev’s expansion into the
non-alcoholic beverage segment commenced in 2008 with
the acquisition of Oishi Group Public Company Limited (“Oishi”)
– the No. 1 green tea beverage producer in Thailand.
Thereafter, we acquired Sermsuk Public Company Limited
(“Sermsuk”) – the beverage producer with the most extensive
distribution network in Thailand – in 2011; and F&N, a leading
Singapore company in the beverage, publishing, and printing
industries, in 2012.

In our pursuit of overseas expansion, we view ASEAN countries
as high-growth markets. Purchasing power in these markets,
which have a total population of over 600 million people,
is increasing amid the growth of their economies, and the rise
in the numbers of investors and tourists to the country.
Beverages from Thailand have high growth potential in these
markets. Consumer behavior in ASEAN countries, especially
Cambodia, Lao PDR, Myanmar, and Vietnam, has been strongly
influenced by the popularity of Thai media broadcasts, singers,
and superstars in these countries, as well as their substantial
native labour force working in Thailand.

Furthermore, ThaiBev’s alliance with F&N has opened up many
opportunities for joint investment in ASEAN. We have adapted
successful business models from Thailand, Malaysia, and Singapore
for other countries while fostering further cooperation to
optimize brand and distribution synergies. For instance, Oishi
successfully penetrated the Myanmar market by collaborating
with F&N’s branch offices in the country. Moreover, we leveraged
Fraser and Neave Holding Berhad’s robust production facilities
in Malaysia for our expansion into other halal markets in
Southeast Asia.

Brand

In 2014, we re-organized ThaiBev’s management structure
and streamlined our core businesses into three product
groups – spirits, beer, and non-alcoholic beverage. We also
identified the core products of each business, namely,
“Ruangkhao”, “Hongthong”, “Blend 285”, “Chang” beer,
“est” soft drinks, “Oishi” green tea, and “100PLUS”.
In the year 2016, we furthered our success through
continued product innovation and the introduction of
more modern packaging in line with our premiumization
strategy.

Our efforts in the spirits product group were focused on
the development of ThaiBev’s flagship “Hongthong” brand,
which has been the No. 1 brand in the brown spirits
category, and “Blend 285” brand through music campaigns
as well as product premiumization. These help us to ensure
that ThaiBev serves consumers in all segments. Moreover,
we revamped the labels of “Blend 285 Signature” and
“Meridian” brandy to give them a more glamorous and
international image. Customer feedback following the revamp
has been positive and the sales volume of both brands
have increased. In late 2015, we began launching our
Scotch whiskies such as “Old Pulteney” and “anCnoc”,
as well as our “Caorunn” gin, in luxury hotels and
restaurants in Thailand.

For the beer product group, “Chang Classic” in the new
emerald green bottle and a champagne gold label has
received greater feedback than expected, representing
a major step on our path towards realizing Vision 2020,
and becoming the top leader in Thailand’s beer market
and achieve significant growth in Southeast Asia.
In addition, the label of “Archa” beer has been revamped
to be more beautiful and modern.

To realize our potential and secure our market leadership
in the non-alcoholic beverage segment, we constantly
introduce innovative healthy products that best meet
the taste and preferences of consumers of all ages, from
all walks of life, and in all moments of daily life. New
products launched in 2016 include Oishi “Kyoho Grape”,
as well as Oishi “Sakura Strawberry”, which featured
innovative packaging that changes color when chilled.
Meanwhile, Sermsuk launched est PLAY “Grape Berry”
and “Korean Orange Cola” to create a sensation in the
carbonated soft drink market. Sermsuk also expanded
the production base of “Crystal” drinking water, which
has been certified by NSF International, USA, as a quality
product with high standards. In addition, the design of
bottles used for “Crystal” drinking water was refreshed
to give the product a more modern look and use thinner
plastic.

Reach

Our robust and extensive distribution network is one of
our major strengths and also a key factor that elevated
ThaiBev to attain its leadership position in Thailand’s
beverage market. We currently have more than 7,000
delivery trucks which reach over 400,000 outlets across
the country, as well as long-standing relationships with
agents, distributors, and restaurants. We have also
established over 1,000 direct sales teams to provide
sales services and manage the visibility of our products
on store shelves. In 2013, we reinforced our domestic
distribution network by establishing Modern Trade
Management Co., Ltd. to distribute ThaiBev’s alcoholic
and non-alcoholic beverages to modern trade operators.
In 2014, we founded HORECA Management Co., Ltd.
(“HORECA”) to close gaps in our distribution channels
to luxury hotels and restaurants and provide us with
the benefits of complete coverage of the segment; and
to introduce our overseas premium products to the
upmarket on-premise segment in Thailand. In 2015,
we established Cash Van Management Co., Ltd. to manage
our direct sales teams, which support around 270,000
retailers across Thailand.

With our route-to-market and distribution strength
through HORECA, we were able to make our “Mekhong”
brown spirits available in more than 1,000 luxury hotels
and restaurants in 2016. Our premium spirits from
Scotland were also made available in more than 200
outlets nationwide.

Besides enhancing ThaiBev’s own distribution network,
we also always seek opportunities to collaborate with local
business alliances in ASEAN markets in order to solidify our
position as the leading full-scale beverage company
in the region and become a truly stable and sustainable
business.

Professionalism

One of the key aspects that drives the business towards
Vison 2020 is people. ThaiBev is determined to continue
building the team of each product group to have a variety of
skill sets and collaborate efficiently. This will be most
beneficial to the operation and enhance the potential of
the group in the long run.

In 2016, ThaiBev invested in workforce with knowledge
and competencies that enable them to be more capable
professionals and further develop their potential. For
example, we launched “Project Rocket” to groom talented
employees that are under 30 years of age and ready to be
devoloped towards future executives. Other projects were
scholarships to be enhance employees’ knowledge,
experiences, and competencies, and “Thailand-Scotland Staff
Exchange Programme” to give employees an opportunity to
gain overseas experience and exchange knowledge on spirits
production techniques so that they could further develop the
business for corporate success.